The recession has pushed retirement further out on the horizon for millions of Americans – and is putting severe strain on the 401(k) model of retirement saving.

If that wasn’t already clear, a bout of stock market selling early this week brought the challenge into sharp relief, as the Standard & Poor’s 500 index closed at a level not seen since 1996, down more than 50 percent in 17 months. Coupled with huge losses of home equity in the housing market, the result is a historic decline in net worth for US households.

The downturn on Wall Street is still far from matching the nearly 90 percent drop seen in the Great Depression. Many investors are hoping portfolio values will get an upward bounce later this year, if markets begin to focus on recovery rather than risk.

But the setbacks faced by retirees and by workers trying to build nest eggs could have lasting impacts. These may include new policies designed to make retirement funds less exposed to market volatility in the future. At the very least, families are having to save more and to do damage control on retirement plans that have sunk in value.

“The hit is very significant,” says Rick Miller, who runs a financial planning consulting firm in Cambridge, Mass. “I’m encouraging people to try to stay on an even keel. And to make decisions that are appropriate to their circumstances.”That may mean sticking with volatile investments, but not in every case.

“I’m not saying to everyone, ‘Hang in there with stocks,’ because for some clients it may not be the right the decision,” Mr. Miller says.

“But I thought the dimensions of the problem would not become clear for another 10 or 15 years, when large numbers of people retired reliant solely on Social Security and 401(k)s,” she said in her prepared statement. “Instead, the financial crisis has accelerated a reexamination of our retirement income system.”

According to the center’s research, 44 percent of Americans in 2006 were “at risk” of having insufficient income for retirement. When broken into three income groupings and three age groupings, Americans’ vulnerability levels ranged from 28 percent, for one group of early baby boomers, to 60 percent – that’s the share of low-income Generation Xers who were at risk.

Now, the recession and the related loss of wealth are pushing those risk percentages upward.

In one sense, the setback for the typical household is smaller than the bear market in stocks implies. Many Americans have no retirement account, and those who have work-based accounts don’t put all their savings in stocks.

Savers lose 25 to 30 percent

Since January 2008, people who have been saving in a workplace plan for a period of 10 to 19 years have seen their account balances fall, on average, by 25 to 30 percent, much less than the S&P index during that time, according to numbers gathered by the Employee Benefit Research Institute in Washington.

But for many families, the home itself is the largest asset, one that may have declined a lot in value, depending on where they live.

Americans are already beginning to adapt by working longer, saving more, and in some cases rethinking how exposed they want to be to the stock market.

Most Americans haven’t lost all appetite for investing in stocks, as occurred for a generation following the market crash that began in 1929. But some people with low risk tolerance are getting out of stocks for good, Miller says.

At the least, the bear market – worse than any since the Depression – serves as a reminder that stocks can go down even if you hold for a decade or more.

“I do believe it’s true that stocks have higher returns” than other investments, in general, Miller says. But “a lot of people had the view that was a sure thing.”

Whether people stay in stocks or not, what’s vital is to have contingency plans, such as fixed-income investments, in case stocks do badly, he says.

Alan Lancz, an asset manager in Toledo, Ohio, says he’s been putting more client money into bonds over the past 18 months, even as he sees a buying opportunity for stocks if share prices dip further.

Financial publications nowadays are matching investment tips with advice on how to spend less, such as a “101 ways to cut expenses” article on the investment website Morningstar.

Americans saving 5 percent

America’s savings rate, as measured by the Commerce Department, rose to 5 percent of income in the most recent quarter. Many economists expect that number to go higher still.

And workers are postponing retirement. According to a new survey sponsored by the investment firm ING Direct, 4 in 10 Americans believe the current economic climate will force them to retire as many as 10 years later than originally expected or not at all.

Some retirement experts call for new savings vehicles that do better at guaranteeing a modest but reliable stream of income. Ideas such as that were among those raised at last week’s congressional hearing.